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THE TRUE CAUSE 



EYEEY AMERICAN PANIC, 



AND 



DEPRESSION OF LABOR AND BUSINESS 

AND THE 

Remedy Thekefoe, 



AS GIVEN BY 



GEOKGE W. DEAN, of Kew York, 

Before the United States Congressional Committee appointed to Ascertain 
(he Cause of Depression of Labor and Business, 

AND ON 

THE DEFECTS OF THE PRESENT TARIFF SYSTEM, 

As OIVEN BErORE THE TARIFF COMMISSIONEBS. 



S^I^r^^'^ 



NEW YORK; 
TROWS PRINTING AND BOOKBINDING CO., 

201-213 East Twelfth Street. 
1884. 

Copyright, 1884, by Gbokge W. Dean. 



\S' 






VIEWS OF GEORGE W. DEAN, 

OF NEW YORK, 

On the Caiise of Panics^ and the Depression of Labor and 
Business^ as given hefore the U. 8. Congressional Oom- 
mittee^ ajppointed to Ascertain the Cause of Depression of 
Labor and Business, 



FORTY-SIXTH CONGRESS, FIRST SESSION. 

Congress of the United States, 
In the House of Bepresentatives^ April 11, 1879. 

The Speaker announced the appointment of Mr. Hendrick B. 
Wright, of Pennsylvania ; Mr. H. L. Dickey, of Ohio; Mr. M. P. 
O'Connor, of South Carolina ; Mr. T. H. Murch, of Maine ; Mr. J. C. 
Sherwin, of Illinois; Mr, Calvin Cowgill, of Indiana; and Mr. J. J. 
Martin, of North Carolina, on the Select Committee to inquire into the 
causes of the present depression of labor; which committee was au- 
thorized in the Forty-fifth Congress, and (not having made a report) 
was continued. 

The following is the resolution for the creation of the committee ; 

FORTY-FIFTH CONGRESS, SECOND SESSION. 

Congress of the United States, 
In the House of Bepresentatives, Ju7ie 17, 1878. 
Mr. Thompson submitted the following, which was agreed to : 
Whereas^ Labor and the productive interests of the country are 
greatly depressed and suffering severely from causes not yet fully 
understood ; and 



2 VIEWS OF GEOEGE W. DEAN. 

Whereas, Our real and permanent prosperity is founded and de- 
pendent upon labor as the source of all wealth ; that when labor 
suffers from any cause which may be removed or its rigor mitigated 
our national harmony and prosperity are thereby imperilled ; that it is, 
therefore, the solemn duty of Congress to inquire into and ascertain the 
causes of such prostration and to devise proper measures for their 
relief, that labor may be restored its just rights, to the end that Jabor 
and all our varied interests may be encouraged, promoted, and pro- 
tected by liberal, just, and equal laws ; therefore. 

Besohed, That a committee, consisting of seven members of this 
House, be appointed, whose duty it shall be to inquire into and ascer- 
tain the causes of general business depression, especially of labor, to 
devise and propose measures for relief, and that to enable said com- 
mittee to perform its important duties hereby conferred, it has leave to 
sit during recess, to employ a clerk and such other assistance as may 
be needed, to examine witnesses, and to report at next session the re- 
sult of its investigations and the measures for relief it may recommend 
by bill or otherwise. 

Attest : 

(Signed) Geo. M. Adams, Clerk. 

This Committee examined in 

Chicago 40 persons 

San Frau Cisco 29 " 

Des Moines 3 " 

New York 2 " (Dr. Peter Cooper and G. W. Dean) 

Boston 7 " 

And views of George W. Dean, given before the Tariff Commission- 
ers, on defects of our tariff system. 



DEPRESSION IN LABOR AND BUSINESS. 



:N'ew York, October 28, 1879, 
Views of Mr. George W. Dean. 

Mr. George W. Dean came before the Committee at 
its invitation. He stated, in answer to preliminary ques- 
tions, that his age is fifty-four ; that he was born in Bos- 
ton, but has been a resident of New York for the last 
fifty-four years ; that he has been thirty-three years in 
business, principally dealing in real estate. 

The Chairman : Have you any clear and regular idea 
of the causes that have produced the disasters to the busi- 
ness affairs of the country and the depression in labor 
during the last ten years ? . 

Mr. Dean : Yes ; I think I have. 

The Chairman : State what, in your opinion, has been 
the cause of the disasters to business affairs and of the de- 
pression of labor for the last ten years. 

Mr. Dean : The cause of our country's poverty in em- 
ployment and gold, statistics prove, was the adding of an 
overwhelming balance of trade debt from the year 1863 to 
the panic of 1873, which amounted, according to official re- 
turns, to over ten hundred million dollars ($1,000,000,000), 
an unnecessary burden and loss in employment, gold, and 
United States bonds, added to our great war debt. This 
trade debt and stagnation of business is the result of 
low^ering duties to suit importers, as was the case in the 
years preceding the bankruptcies of 1837 and 1857, which 



DEPEE8SI0N IN LABOR AND BIJSINESS. 



should have been averted by increasing duties, reducing 
imports below trade exports. See excess of imports over 
exports as foilov^s : 



Year. 


Losses in balance 
of trade against 
our country. 


Gain in balance of trade 
in favor of our country. 


Loss in excess of 
specie exported 
in settlement of 
balance of trade. 


1863 ... 


$39,370,818 

157,609,295 

72,716,277 

85,952,544 

101,256.959 

75,483,541 

131,388,682 

43,186.640 

77,403,506 

182,417,491 

119,656,288 




$)6,571,956 
92,280 920 


1864 




1865 




57 833 154 


1866 




75,343,979 

38 797 897 


1867 




1868 




79,595,734 
37,330,504 
31,736,486 
77,171,964 
66,133,845 


1869 




1870 




1871 




1872 




1873 




63,127,637 
38,175,499 
71 231 425 


1874 


$18,876,698 


1875 


19,563,725 










$1,106,005,766 

18,876,698 


$18,876,698 
People mortgaged for 


$785,331,000 
301,798,068 


Total loss 


$1,087,129,068 




$1,087,129,068 









The way Congress restored business after the bank- 
ruptcies of 1837 and 1S57 was by a very large increase of 
duties on imports of our kind in the years 184:2 and 18G1, 
which immediately gave confidence and employment to 
our producing and laboring classes. 

This country's market is worth more to our industrial 
manufacturing interests than all the other markets in the 
world. Give them this, their own market, which belongs 
to them by right and reason, and they will have no longer 



DEPEESSION IN LABOR AND BUSINESS. 5 

anj" want of business and prosperity. Then the nation will 
save the money ($300,000,000 per annum) now foolishly 
paid abroad to create over-productions of goods in our 
market which can be as well made at home, without the 
loss of paying the foreign cost, as we do now. At home, 
the cost of production is to our country labor alone. 

Foreign manufacturers desire low duties upon their 
goods, and are willing to pay to cause a reduction of du- 
ties for them. 

No tariff is practically protective that does not give 
our country a favorable balance of trade, and when it 
does so, don't destroy that balance in our favor by reduc- 
ing duties. 

All creditor nations are great manufacturing nations, 
while debtor nations are not manufacturing nations, but 
borrowing and dependent nations. 

Low or non-protective duties are only suitable for a 
people who can afford to work for the lowest earthly 
wages, and whose country's industries cannot be usurped 
by foreign competition. 

The overwhelming balance of trade debt created from 
1863 to the panic of 1873, amounting to over $1,000,000-, 
000, is fast being liquidated by a favorable balance of trade 
in our country's favor. The tariff duties, if now reduced, 
will again turn against our country an adverse balance 
of trade, with all its attending evils, and before we have 
gained in the total amount the sum our people lost in the 
above-named years, by a tariff too low then to check ex- 
cessive imports over our exports. All tariffs are too low 



6 DEPRESSION IN LABOR AND BUSINESS. 

which do not give onr country a favorable yearly balance 
of trade, whatever the rates of duty may be. The higher 
the duties the more completely are American industries 
protected and developed, to the advantage of our working 
classes and producers of all and every other kind of 
American growth or production. When the mining and 
manufacturing industries tlirive, the farmer finds better 
prices for his products at home than abroad and a quicker 
market. When either suffers from the want of demand 
from the othei*, both are made to suffer, and all American 
industries should unite together as one man in defending 
any American interest against all foreign combinations in 
Congress to usurp and destroy either American employ- 
ments or productions. 

The free-trade league now assert and proclaim that the 
United States must bu}^ of other nations if we wish to sell 
them our exports. This is silly argument. The United 
States bought from the years 1863 to 1873 (panic) over 
one thousand million of dollars of foreign nations more 
than foreign nations bought of us. . We then bought 
more than we should, but they did not commit the same 
folly, and would not if we committed the same folly over 
again. This doctrine is better answered now by our in- 
creased sales of exports, and our large decreased purchases 
of imports, now giving our country a favorable balance of 
trade, which alone checks the foreign demand for gold, 
and thereby destroys the premium by rernoving the cause. 

The Chairman : State the causes of the destruction of 
American commerce. 



DEPRESSION IN LABOR AND BUSINESS. 7 

Mr. Dean : My answer is : 

1st. The acknowledgment of belligerent rights by 
England to the South, which permitted acts of war upon 
our ocean commerce, and partly destroyed it. 

2d. The revolution from wood, to iron for ship-build- 
ing. 

3d. The want of patriotism and statesmanship in our 
nation's law-makers in not paying a sufficient sum for 
mail service, as other nations have done, to sustain their 
shipping interest. 

4th. To remedy the above misfortunes I would recom- 
mend a law to be made favoring American shipping by 
differential duties upon imports carried in American bot- 
toms ; this law to be guaranteed to our shipowners for a 
certain number of years — for instance, ten years. This, 
I hold, would quickly restore our ship-building industries 
and restore our ocean tonnage. 

The Chairman : What is your idea as to the policy of 
an income tax as a source of revenue? 

Mr. Dean: I favor an income tax, because it is just, 
and falls only on those who are the most able .to con- 
tribute to the support of the Government ; they being the 
ones who have received the most favors under our laws, 
and are the ones who really have more use of the Govern- 
ment, because possessing more of value which needs tlie 
most protection, and for the further reason that taxation 
should be uniform, and operate equally on all trades, oc- 
cupations, businesses, and incomes. 



8 DEPEESSION IN LABOE AND BUSINESS. 

The Chairman : What would be your remedy to pre- 
vent a recurrence of the disasters alread}^ experienced? 

Me. Dean : The remedy to prevent the country's past 
ills from occurring in tlie future will be in always having 
tariff laws that encourage economy in our imports, and 
encourage all kinds of industries at home; in other 
words, a tariff that will give the American working- 
people a preference in their own market over the pro- 
ductions made abroad, thus keeping the cost of foreign 
imports largely below American exports. Gold and bonds 
will flow from abroad in settlement of the balance of 
trade in our favor, creating a supply of gold greater than 
our needs and demand, removing permanently the cause 
and complaint of a superior value of gold over United 
States notes, and which w^ould probably in time place 
gold, like silver, at a discount. 

Tariff protection to one or many of our labor indus- 
trial pursuits against foreign competition is not (as as- 
serted) at the expense of any other American class or 
section of our country, for what benefits one State or 
class as a member of the whole country prospers the 
entire nation. Protection to American employments is 
wholly at the expense and loss of the foreign producer, 
w^ho is deprived of sujpjplyiiig our market, which is that 
much gain to our employments — for be it remembered 
what would have been the foreign cost, if imported, 
would have been our country's loss, in money and em- 
ployments, as a penny saved is a penny gained. 

The South and West, more than any other section of 



DEPRESSION IN LABOR AND BUSINESS. 9 

our country, should demand a protective tariff for its own 
"welfare and interests, to develop its yet undeveloped 
resources. The South and West, by 7nanufacturing the 
raw products now produced hy them^ would every year 
more than double the value of their present production ; 
capital would seek them — but not until then — as capital 
seeks only that part of our country which possesses enter- 
prise. The Eastern manufacturers dread higher duties, as 
they would develop the South and West at the cost and loss 
of their trade, as living and wages are higher in the East. 
A government that will not protect and develop its 
country's industries is cither corrupt or imbecile- 
Let our Government give to our miners and manu- 
facturers the same practical protection which the farmer 
has, and which commerce enjoys upon American waters. 
Both are free from foreign competition by law and cir- 
cumstances. Our country's gain by exports would then 
exceed our needed imports by three or four hundred mil- 
lions of dollars per annum. In five or ten years our 
people and Government would be out of debt by the old- 
fashioned way — increase of employments and industries 
and saving by reduction in money costs for imports. • 

It will reduce the amount of work now unnecessarily 
done abroad for our market two hundred million dollars 
annually, and increase ours correspondingly, making a 
gain to our people of that amount annually. 

Our country has the greatest natural resources of any 
in the world, and is deficient in statesmanship in making 
it productive. 



10 DEPRESSION IN LABOR AND BUSINESS. 

When either of the real producers of our country's 
wealth, manufacturers, miners, or farmers, are impov- 
erished by foreign competition, then all are made to 
suffer, because each one's productions add to the one 
total production of our country. St. Paul tells us, " If 
one member is sick the whole body suffers." 

A large increase of duties on foreign industries of our 
own kind is no increase of taxes upon our own people, but 
the reverse, being an increase of wealth to them, as oar Gov- 
ernment requires only a certain amount of revenue for 
its support, which is as large under low as under pro- 
tective duties. The difference and gain to our people is 
the increase of employment and gold, corresponding with 
the reduction made in the# amount and gold cost of our 
imports. 

The more free our communists in Congress are to give 
other nations our trade, by low duties, the less business, 
employments, and gold we will have for ourselves. 

The Chairman : State your opinion as to the currency. 
Should it be increased ? Should the national bank-note 
issues be withdrawn and legal-tender money substituted ? 

Mr. Dean : The currency of the people should be in- 
creased to aid and provide means to distribute a growing 
volume of productions and business, and to aid in develop- 
ing our country's undeveloped resources, to the same 
amount jyer capita that France enjoys, which country pos- 
sesses none too much business capital. The national 
bank-note issues should he withdrawn to prevent either 
contraction or inflation of our paper currency, and legal- 



DEPEESSION IN LABOR AND BUSINESS. 11 

tender or United States certificates of dejjosit made a full 
legal tender substituted in their place. The national 
bank charters should be left undisturbed, and left to per- 
form only their legitimate business — that of banks of dis- 
counts and deposits. The amount of currency j!?6^ capita 
in the United States is less than in any other commercial 
country in the world. This being a younger and more 
extensive country, for many reasons sliould have j)er 
capita the greatest amount. In France it is $36.85 ; 
Great Britain, $23.66 ; German Empire, $20.64 ; and in 
the United States, $15.06. With $500,000,000 the per 
capita would be but $12 a head. 

The Chaikman : State whether, in your opinion, it 
would be right and proper for Government to tax incomes 
as a source of revenue. 

Mr. Dean : I answer to that, yes. 

Tpie Chairman : State whether, in your judgment, it 
would not be a wise policy for the Government to furnish 
means and facilities for the poorer classes of the popula- 
tion of the country who are out of employment to settle 
upon and occupy the public domain. 

Mk. Dean : Yes. I am in favor of all that ; in favor 
of it heartily. Only I do not know that the community 
is ripe for the question at present. I think that the peo- 
ple are greatly in want of education on that subject. The 
Government should aid the poor as well as it does the rich. 
It aids railroad corporations. The Pacific Railroad would 
not have been built for a good many years had it not 
been for Government aid. When the Government stepped 



13 DEPRESSION IN I.ABOK ANP BrSINES?. 

ill with gniiits of money and laiui, and with the loan of 
its ciwiit, the work was done rapidly. 

TwK Chairm.v:^:: Po you regard the agricultural in- 
terest of the country as paramount to any one particular 
iuteivst i 

Mk. Dkan: I think that the agricultural question 
tiikes care of itself. It cannot be "sold out*' as the 
mannfacturei^ can be sold out Xo Europe^m intei'ests 
would care to lu\^*e a law to have farming products from 
abroad admitted here free of duty as they would like to 
have forv^ign manufactures admitted. I think that our 
manufacturers need assistance and protection; but in- 
ste^id of having it they an> ""^ sold out.*' 

TiiK Chaikma:^ : What I wish you to answer directly is 
whether the agricultural interest of the country is not of 
more imjv>rtani'C thai\ any other one brancli of industry, 
and whether it ought nor therefore have tlie piv^per means 
of development i 

!\ru, Pkan : Yes : i: is the paramount interest of the 
country. But you cannot xery well legislate so that the 
land will not prvxiuce. You cannot very well place other 
coautries in competition with onis in r^aid to the pro- 
dacts of the eoil. But manufacturers need laws to prvv 
teot tiieir iuterests. 

Adjoaraed 



DEFECTS IN OUR TARIFF SYSTEM. 13 



VIEWS OF GEOr.GE W. DEAK, 

Given lefore the Tariff Commissioners^ on the Defects 
of our Tariff Systewj and the Remedy tlierefor^ at 
the Windsor Hotel, New York, OctoherZ, 1882. 

Mr. George "W. Dean, of New York, addressed the 
Commission as follows : 

Gentlemen of the Tariff Commission : I am not here 
to represent any particular American interest, bat to give 
niy views on the defects of the present tariff system, and 
the remedy therefor, by a new amendment or section 
added to our tariff laws for self-adjusting duties, to pre- 
vent a continued yearly adverse balance of trade with 
other nations, and its disastrous effects upon our country, 
as in former times. 

Having given from my youth a great deal of time and 
thought to the very important subject of our tariff laws, 
being the laws having a direct bearing upon our wliolc 
country's prosperity, and being a subject of paramount 
importance to every American business, farmer, trade, or 
industry, and to wages of workingmen, which interests so 
many for good or evil ; and as the country looks to your 
Commission for judicious recommendations in relation to 
the defects in our present tariff, I take the liberty to 
recommend to your Commission a new amendment or 
section to be -added to our tariff laws, to remedy what I 
have deemed for many years a vital defect in said laws, 



14 DEFECTS IN OUR TARIFF SYSTEM. 

and it would be, in my opinion, greatly to our country's 
advantage to adopt the same ; which new section, in my 
judgment, would be a perfect preventive against a con- 
tinued yearly adverse balance of trade to our country (as in 
former times), and of great panics, affecting all businesses, 
such as occurred in the years 1837, 1857 and 1873, with the 
succeeding years of depression to employments and wages, 
and the suspension of specie payments. Statistics of our 
trade imports and exports (if referred to) will prove 
foreign competition and over-importation to be the true 
and only causes of all our former panics, being disas- 
trously large and in excess of our exports, with a loss to 
our country in both gold and labor, employments amount- 
ing to many hundred millions of dollars for imports in 
competition with our own kind of products, for the years 
just preceding each and every panic, which our exports 
of merchandise could not liquidate and balance, as would 
have been done if our imports had been in value curtailed 
to that of our exports by defensive duties in amount to 
equal the real difference of foreign and American wages, 
which would have increased American productions and 
made our country the creditor in place of the debtor na- 
tion, being made thus by excess of imports alone. 

In other words, by the tariff our liabilities for mer- 
chandise imports were allowed to largely exceed our 
assets for merchandise exports, which is sufficient evi- 
dence that our country was unnecessaril}^ and disastrously 
running in debt by buying more from other nations than, 
they bought of iis, or was good for our labor employments 



DEFECTS IN OIJR TARIFF SYSTEM. 15 

or financial interests. For ours is not an old-established 
and wealthy country like that of England, living partly 
npon its money investments abroad, and on other nations 
by its vast ocean shipping interests and carrying trade. 

One nation doing business with other nations is, by its 
follies and extravagance, subject to the same law of panic 
and failure from adverse trade as are separate individuals 
in trade; and our nation, to have its own States and 
people thrive, must be encouraged by its own revenue 
tariff laws to patronize its own country's productions in 
preference to all others, that w^e may in turn be em- 
ployed, prosperous, and self-sustaining, to that extent at 
least of preventing ours from becoming the debtor people 
and nation by an unfavorable adverse balance of trade 
with other nations, as in the years just preceding our 
panic times ; and by so doing would save and economize 
to our country in the total foreign cost for imports of a 
kind we produce to sell, adding by this means to our total 
wealth in productions and to our people's prosperity, in 
which, be it remembered, we directly or indirectly share 
more or less, in whatever business, vocation, or part of 
the coimtry we may live, as we all do share more or less 
in the suffering from. adverse business times. 

A judicious tariff, in my opinion, should be a self- 
adjusting one, and contain an element within itself to 
immediately check, at the end of any fiscal year, an ad- 
verse balance of trade, without waiting, as we did under 
the old tariff system, for a panic, suspension of specie 
payments, and depression of business and wages to come 



16 DEFECTS IN OUK TARIFF SYSTEM. 

upon lis, and tlien, for the want of a remedy at hand, 
take years to care by a starvation and bankrupt process. 

The remedy I offer (or one to the same effect) is in the 
following' section, and should be embodied in our tariff 
lawSj viz. : 

Section — . And he it further enacted. That at the terraination of 
any fiscal year that the total imports of merchandise shall for the year 
amount in.value to over five-sixths of the total value of our country's 
merchandise exports for the same year (not counting- or including 
money or gold and silver bullion as an export or import), then the Sec- 
retary of the United States Treasury is empowered and duly authorized 
and directed by Congress to immediately increase the duties one-sixth 
in amount upon all present dutiable imports, Congress retaining the 
right to reduce or increase all or any of the duties so increased by said 
Secretary at any time. 

KoTE. — The difference of one-sixth allowed in mer- 
chandise in our favor is not equivalent to our losses to 
foreign nations for our ocean-carrying trade ; American 
interest-bearing obligations held in Europe, and the loss 
to oar coantry by expenses of American toarists abroad, 
being together estimated at over $200,000,000 in gold per 
annum. 

The above new tariff section for our tariff laws is for 
the important purpose of avoiding future panics, farther 
depression of oar country's total production, labor, and 
basiness, and to keep our coantry by home production a 
creditor nation, with favorable balances of business trade. 
And it will also cause our coantry to retain and gain in 
its gold reserve to our advantage, as our then greater ex- 
port value over import cost would be ample to pay for all 



DEFECTS LN^ OZR TAEIEF SYSTEM!. 17 

foreign taxation for imports, without exporting gold for 
that purpose. To some persons it may at first sight ap- 
pear hke instability in tariff rates, but upon reflection 
and application would not be found so, as the duties are 
only to be changed by the United States Treasurer in a 
certain emergency of ruinous excessive cost for imports, 
and is not likely to change the duties more than once 
or twice in twenty years. To those who object to a 
change of duties when required to continue our country 
having a favorable balance of trade, I would say they 
choose of the two propositions the most disastrous one to 
our people's prosperity, that one of a debtor people or 
nati(m, as in the preceding years just before every former 
panic. 

Then the question of the rate of duties upon imports 
will be decided alone, and fairly, by the total relative 
value of imports and exports, and by the balance of trade 
with nations ; and, better yet, be removed from the pre- 
judices of partisans and politics, placing, as it would, our 
country's prosperity upon a permanent, self-sustaining 
basis, by a continued favorable balance of trade, which 
should be paramount to all other single interests, either 
American or foreign. 

The following are the official statistics of imports and 
exports and losses for the year and preceding years to each 
panic which occurred in the years 1837, 1857, and 1873, 
showing each year's loss to our industries and w^ealth by 
adverse balance of trade taxation, and being the only 
true and svjjicient cause for our country's former im- 
poverishment and panics ; 



18 



DEFECTS IN OUR TARIFF SYSTEM. 



Years. 


Foreign taxation 

merchandise. 

Imports. 


American 

merchandise. 

Exports. 


Yearly loss by- 
adverse trade or 
foreign taxation. 


1831 


$82,808,110 

75,327,688 

83,470.067 

86,973,147 

122,007,974 

158,811,392 

113,310,571 


$59,218,588 
61,726,529 
69,950,856 
80,623,662 
100,459,481 
106,570,942 
94,280,895 


$28,589,527 


1832 


13,601,159 


1838 


13,519,201 


1884 


6,349,485 


1835 

1886 


21,548,498 
52,240,450 


1837 


19,027,676 


Panic of 1837, caused 
by seven years of adverse 
balance of trade or f or- 

picrTi t'.nYn.t.ioTi fiOta.l loss 


$149,675,991 

$29,183,800 


1850 


$164,034,033 
200,476,308 
195,387,814 
250,157,145 
275,991,779 
231,650,340 
295,650,938 
338,511,295 


$134,900,233 
178,620,138 
154,931,147 
189,869,162 
215,828,200 
192,751,185 
266,438,051 
278,906,713 


1851 


21,856,170 


1852 


40,456,167 


1853 


60,287,983 


1854 


60,663,579 


1855 


38,899,205 


1856 


29,212,887 


1857 


54,604,582 






Panic of 1857, caused 
by eight years of adverse 
balance of trade or for- 


$335,018,573 

$157,609,295 


1864 


$301,113,322 
209,656,525 
423,470,646 
381,043,768 
344,873,441 
406,555,879 
419,803,113 
505,802,414 
610,904,622 
624,689,727 


$143,504,027 
136,940,248 
337,518,102 
279,786,809 
269,889,900 
275,166,697 
376,616,473 
428,398,908 
428,487,131 
505,033,489 


1865 


72,716,277 


1866 


85,952,544 


1867 


101,256,959 


1868..' 


75,488,541 


1869 


131,388,682 


1870 


48,186,640 


1871 


77,408,506 


1872 


182,417,491 


1873 


119,656,288 






Panic of 1873, caused 
by ten years of adverse 
balance of trade or for- 
eign taxation, total loss. 


$1,047,070,223 










Total foreign taxation 
losses 


$1,531,259,687 











DEFECTS IN OUE TARIFF SYSTEM. 19 

I further recommend, believing it wise and judicious, 
a change in the valuations of imports from foreign to 
home valuation upon all imports of a kind which we pro- 
duce to sell. In our country's earlier days, we then not 
being a manufacturing country, foreign valuations were 
necessary, but this necessity no longer exists and should 
be changed, being now more convenient to ascertain the 
true value at home than the true one abroad for merchandise 
in competition with home productions ; it will tend greatly 
to correct the growing evil of foreign undervaluations, 
which undervaluations are directly acts of smuggling of 
part of the imports, and practically annulling our tariff 
laws by defrauding our Government of its just revenues. 

As to the fruits of protection, and of a revenue free- 
trade tariff, the former makes our country a prosperous 
business nation and a creditor one, the latter a failing and 
debtor one. Protection increases the total wealth and 
value of our country's production. Revenue free-trade 
tariff reduces it. Protection is at the expense of foreign 
industries, by their loss of the American market. Eev- 
enue free-trade tariff is at the expense of American in- 
dustries, they being wrongfully deprived of their own 
market. Protection will establish industries South and 
West to their advantage. Revenue free-trade tariff will 
prevent them. Protection destroys foreign monopoly of 
our market. Revenue free-trade tariff protects it. Pro- 
tection builds silk, woollen, cotton, and other factories. 
Revenue free-trade tariff, like an incendiary, destroys 
them. Protection economizes imports and saves in the 



20 DEFECTS IN OUE TARIFF SYSTEM. 

cost for them, which is equivalent to an increase of our 
exports. Revenue free-trade tariff increases imports and 
the foreign cost, which is equivalent to a reduction of our 
exports. Protection opens new mines and in new locali- 
ties builds foundries, rolling-mills and machine shops, and 
gives employment and good wages to thousands. Eev- 
enue free-trade tariff discharges them ; puts out the fires 
in the furnaces, silences the anvils and trip-hammers, 
stops the busy whirling wheels, the spindles, and drives 
hundreds of thousands of honest, industrious employees to 
idleness and want, and some to suicide and crime. Pro- 
tection creates a demand for labor and enhances wages. 
Pevenue free-trade tariff destroys both. Protection com- 
pels gold to flow into our country, to our • advantage. 
Pe venue free-trade tariff to flow out, to our ruin. 

This country can always have a large business balance of 
trade in its favor if Congress chooses to give to our own in- 
dustries their own home market, being a question of labor 
only, which our tariff wholly controls by duties on imports. 

I hold that no tariff is a protective one that does not pro- 
tect the whole country's business from an adverse balance of 
trade. The so-called protective tariffs may protect one 
special interest, or more, but does it protect the whole coun- 
try's interests from becoming the debtor nation ? If not, 
then it is not a protective tariff, but one that leads our coun- 
try to panics and bankruptcy, as in former times. Pros- 
perity to the whole country's business should be paramount 
to either the importer's or foreign manufacturer's business, 
or any other single unproductive interest of our country. 

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